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D-segment car sales bring cheers to firms

Surajeet Das Gupta & Partha Ghosh

Car-makers who launched new models in the D-segment of the car market have had a lovely run thus far, notwithstanding the spectre of recession looming large over the sector.

The demand for the upmarket Honda Accord (price tag over Rs 1.4 million) and Hyundai Sonata (between Rs 1.1- 1.3 million), which were launched last month, have exceeded expectations.

Japanese giant Honda Siel Cars India Ltd has already exceeded its target of 200-250 units of Accord in the first month. Manish Rastogi, marketing manager of Honda, said the company sold around 330 Accords in July.

Rastogi said at this rate the company will not just meet its targeted sales of 2,000-2,500 cars by the end of this financial year, but may actually exceed it.

Honda has planned its production in such a way as to ensure that its customers do not have to wait for delivery. "Production started in end May and hence we are in a position to sate the demand for the car. Subsequent production can be controlled depending on the demand for the car," Rastogi added.

But that was not the case for Hyundai Sonata, which has a waiting period of as much as one month to forty days as the company has made it clear that it would first clear the backlog of customers who had evinced interest in buying the car from February when the Korean company started its roadshows all over the country.

B V R Subbu, executive director, Hyundai Motors India Ltd, said the demand for the car has been "stronger than we had anticipated".

Subbu pointed out that Hyundai already has 600 customers who had shown interest in buying the car.

"With about 40 per cent of this group willing to buy the car we will have a backlog of 250 cars which would be completed by September. As a result, we are telling 700 other customers who have listed themselves after the car was officially launched in mid-August that they have to wait till then," he said.

The car-maker has been able to deliver around 50-odd cars in July and hopes to up the production schedule from eight cars a day to 16 cars in October.

But Subbu agrees that there are constraints in the capacity, which has been earmarked for the car for them to be able to reduce the gap between demand and supply. "We won't be able to go beyond the numbers that we had fixed for this year which is around 2,000 to 2,500 cars because of the capacity constraint," he said.

Deep Hyundai executive A H Ganeshan said: "There is a waiting period of 25 days for the Sonata. Perhaps, we were not expecting such a demand."

Some industry observers, however, say that some of the companies are going slow in the production of D-segment cars as they wanted to gauge demand and then hike the price of the car later on.

"It seems for some of the car-makers the aggressive price was only an entry strategy and with demand being good they will increase price and them production," said an industry analyst.

But car companies are not complaining.

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